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Case study.pptx

  1. Analysis Of Pharmaceutical Industry Based On Porter’s FiveForcesModel
  2. Dr. Reddy's Laboratories Limited is a pharmaceutical company founded by K. Anji Reddy in 1984 and is engaged in providing medicines. It is India’s Second biggest pharmaceutical company and is headquartered in Hyderabad. The Company operates in three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. • The Global Generics segment includes manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). • PSAI segment includes the Company's business of manufacturing and marketing active pharmaceutical ingredients and intermediates (API) or bulk drugs. • Proprietary Products segment focuses on the research, development and manufacture of differentiated formulations and new chemical entities. These products fall within the dermatology and neurology therapeutic areas, and are marketed and sold through its subsidiary, Promius Pharma, LLC. Company Profile
  4. To be first Indian Pharmaceutical company that successfully takes its products from discovery to commercial launch globally To become a discovery ruled global pharmaceutical company with a core purpose of helping people lead healthier lives
  5. Quality Harmony and Social Responsibility Respect for the individual Collaboration and Teamwork Innovation & Continuous Learning
  6. Threat of new entrants(lo w) Government regulations in terms of quality and price leads to hindrance in establishing new manufacturing operations. Impeding new patent regime will raise the barriers to entry. High entry barriers due to costs associated with research & development of new drugs (i.e. years of investment in R&D for a drug that may/may not work)
  7. Industry competition(hig h) Most competitive industry with hundreds of competitors. Major competitors for Dr.Reddy are Sun pharma, Novartis, bayers, Pfizer, GlaxoSmithKline, novo nordisk. High growth prospects. Working capital requirement is high
  8. Bargaining power of buyers(lo w and medium) End user of the product is different from the influencer(doctor) Consumer has no choice but to buy what doctor says Hospitals & other health care organizations buy in bulk quantities and exert pressure on pharmaceutical companies to keep prices in check Regular patients have lost bargaining power due to price increases in generic drugs
  9. Bargaining powers of suppliers(low) Pharma industry depends upon several organic chemicals Very competitive and fragmented industry Chemicals are largely a commodity Pharma industries can switch from their suppliers without incurring a very high cost
  10. Threat of substitutes(lo w) Naturopathy Ayurvedic Homeopathy
  11. • Leverage existing infrastructure to deal with the need of Oncology Market. • New partnerships to discover and develop new therapies focusing on Biosimilar development. • Find products which will be less competitive in the market – Niche Products, products with IP and technology barrier. • Increase domestic footprint in generic market. • Demand of cost effective generic drugs in developed and under developed countries. • Disposable income of people is rising and they are becoming health conscious – demand for products like multi vitamins are increasing ex. success of Rivital by Ranbaxy. Opportunities
  12. • Increasingly stringent regulations for new drug development. • Intense competition in the generics segment. • Price pressure and presence of international giants like Sandoz and teva are considerably slowing down performance of Indian Pharmaceutical companies. • US market is getting with Indian overcrowded players. Threats